BEIJING (NYTIMES) - China's Premier Li Keqiang presented an optimistic picture of relations with the Trump administration on Wednesday (March 15), arguing that the two sides would be able to overcome their smoldering tensions over trade imbalances, currency policy and geopolitical disputes across Asia.
The comments appeared intended to set an upbeat tone for a first meeting between President Donald Trump and his Chinese counterpart Xi Jinping that is provisionally scheduled for next month at Trump's Mar-a-Lago resort in Florida.
"This relationship is crucial for not just China and the United States, but also for regional and global peace, security and stability," Li told hundreds of reporters at the end of the annual meeting of China's legislature, the National People's Congress (NPC).
"China and the United States now share extensive common interests. It's also true that there are some differences between the two countries," Li said. "But I believe it's important for both countries to uphold strategic interests and to sit down to talk to each other so as to enhance mutual understanding and trust."
Before and after his election victory in November, Trump threw down a number of challenges that rattled policymakers in Beijing. He threatened to punish China over its big trade surplus with the United States. He suggested he might abandon longstanding American policy on Taiwan, the self-governed island that China treats as an illegitimate breakaway territory.
His Secretary of State Rex Tillerson promised to stop China's building of islands as military outposts in the disputed South China Sea, where the Philippines, Vietnam and other neighbours have competing territorial claims.
But more recently, Trump and Xi have spoken over the phone, and Trump reaffirmed established American policy that Taiwan is a part of "one China."
Administration officials have also reined in warnings of possible military action in the South China Sea. And so far, at least, the White House has not introduced measures that could sharply cut the flow of Chinese goods into the United States.
Last year, the United States' deficit in trade in goods with China reached US$347 million (S$491 million), and Trump has promised to close that gap, which he has also attributed to what he calls China's rigged currency exchange policies. But Li said that a trade war of tit-for-tat protectionist measures would ultimately damage the American economy.
"If a trade war breaks out between China and the United States, it would be foreign companies, in particular American firms, that would bear the brunt," he said, citing what he said were findings from a foreign think tank.
"Our hope on the Chinese side is that no matter what ructions this relationship experiences, this relationship will continue to move forward in a positive direction."
He also stressed that China would pay close attention to whether Trump's administration stuck to the One China policy, which in effect denies Taiwan the possibility of recognition as a separate country, something to which pro-independence groups in Taiwan aspire.
"This policy constitutes the political foundation of China-U.S. relations," Li said of the One China policy. "With that foundation in place, we believe there are bright prospects for China-US cooperation."
Li also presented an optimistic view of China's economy this year. At the opening of the meeting last week, he said the government wanted the economy to grow 6.5 per cent or more in 2017. The target represented a slight easing from last year's goal, which was 6.5 to 7 per cent. China's economy grew 6.7 per cent last year, according to official statistics.
At his news conference, Li said that the 6.5 per cent target differed little from last year's target. "We believe that China will continue to be a strong driving force in the face of a sluggish global economy," he said.
But the trade-offs between stoking growth and fixing underlying economic problems have become increasingly difficult and contentious.
The government says the economy must keep expanding at a relatively fast pace to create enough urban jobs for roughly 11 million rural migrants and new university graduates this year. Xi will also oversee a big leadership shake-up at a Communist Party congress this autumn, when he starts his second term as party leader, magnifying the government's hunger for social confidence and stability.
